The purely hypothetical situation continued...

Yesterday we discussed a purely hypothetical situation where someone who was down on their luck with a good credit history sold their identity to make a buck.  Continuing along with that theory, we have to ask ourselves, how did the guy who sold his identity and credit get to the fraudsters?  Perhaps they were sitting at a bar together and started talking about fraud and how to rip off banks?  

Maybe they met on a bus?  




Or perhaps at a baseball game...



Or maybe they were introduced by a "broker", someone that deals in stolen identities and credit fraud?  We sincerely doubt you just happen to randomly come across a name, social security number and employment history of someone who's credit worthy for an over half a million dollar fraud, correct?  Just like the junkie knows where to go to get his hit, people know where to go to get what they need whether it's drugs, money, prostitutes or money for selling your identity for a Straw Buyer scam.  What we're proposing is that our down and out Straw Buyer sold his identity to one such "broker" who then turned around and used his identity to conduct several frauds before the Straw Buyer was busted out and no longer credit worthy.  See where we're going?

Now, once all these frauds are committed using our Straw Buyer, why the hell would he turn around and call the cops after what could have been a nearly half a million dollar profit?  Could it have been Straw Buyer remorse?  We doubt it.  Or did the Straw Buyer get screwed by the "broker"?  Maybe the Straw Buyer got shorted on his share of the proceeds?  Perhaps they lied about what his cut was going to be?  Or maybe they turned around after pocketing the money and told the Straw Buyer that the deal didn't happen at all perhaps knowing that he couldn't call the cops since his name and real signature was all over the original purchase contract and all the loan applications?  Pure conjecture, but plenty of  explanations as to what could have taken place...

So enough with the hypothetical crap.  Whether Bernardo Barrera was actually involved in the Oak Avenue Mortgage fraud, one has to ask, how the hell did the fraudsters get his identity?  Was he an acquaintance of one of the people charged?  Was he a previous client of one of the fraudsters who just happened to keep his information on file?  Was he a client of a friend of one of the fraudsters who then turned over his information for a fee?  Or did he sell his identity to a master identity theft and mortgage fraud ring who then brokered the identity to one of the people charged in the Bernardo Barrera mortgage fraud?  I'm gonna guess the later.  The proof is right here in this blog and throughout the states paperwork, problem is Detective Baluja and ASA Kostrzewski either couldn't see it or didn't want to see it as the truth would have destroyed their case...

Ever have your identity stolen?

If you've ever had your identity stolen, you know the kind of mess it creates for you.  I had my identity stolen about 16 years ago, no big deal, someone had gotten a couple of credit cards under my name without my consent and charged away.  I immediately called all the different card companies and credit reporting agencies and notified them of the situation.  Once I did that I thought I had it all behind me, little did I know what I had gotten myself into!  Once I got the fraudulent items discharged and removed from my credit my identity was flagged within all the credit bureau's as having been a victim of identity theft.  From this point forward there were no more instant credit approvals at department stores or car dealers, every request for credit I made from that point on had to be manually approved by whoever was considering my credit worthiness.  Now that was for small stuff, if I was applying for major credit (car, home, etc) it was even worse, you can't imagine what kind of hassle I had to go through in order to get ANY KIND OF CREDIT after my identity was stolen.  In fact it obtaining credit became such a hassle over the next few years, I actually abstained from getting any new credit at all.

What's my 16 year old identity theft have to do with our blog?  It's safe to conclude from my story that if you were a victim of identity theft any credit card, loan, etc that you try to obtain after you claimed your identity was stolen is going to be a major pain in the ass, whoever is considering lending you money is going to go through your request for credit with a fine tooth comb and turn your life upside down before giving you a cent.  In other words, the last thing in the world you'd want to do if you were running a mortgage fraud scam with a straw buyer would be to have them claim their identity was stolen right before you pull of your scam right?  Imagine if Mr. Barrera was really involved in the fraudulent purchase of the Oak Avenue home, based on what we've gleaned from my story, it would have been much more difficult (if not impossible) for Mr. Barrera or the people who were using his credit to obtain a loan from Citi Mortgage for the purchase of the home.  So how the hell did Mr. Barrera or the people who used his credit get the loan for the Oak Avenue home when we learned that in early February 2008 Mr. Barrera had claimed his identity was stolen on another fraudulent deal? Let's let the documents tell the story, here's a page from the 1003 loan application that Mr. Barrera filled out for the Oak Avenue home mortgage...

Barrera Loan Application for Oak Avenue Home

Notice the date?  January 16, 2008.  So far so good.  Just 9 days later GE Money, the bank that lent the money on the fraudulent boat purchase mails a statement for the loan to Mr. Barrera's address...


Bernardo Barrera Boat Loan Statement

It's safe to conclude that by the end of January or the first week of February 2008 that even if on the odd chance that Mr. Barrera really got his identity stolen for this boat deal, he was alerted to its existence well before he told the police he found out his identity was stolen for the boat deal.  Now, let's take a look at that Citi Mortgage commitment letter for the Oak Avenue home loan that Citi mailed to Mr. Barrera's primary residence...


Bernardo Barrera Commitment Letter 2 From Citi Mortgage for Oak Avenue Home

That letter from Citi Mortgage was mailed to Mr. Barrera's primary residence on January 31, 2008, we can only assume it reached Mr. Barrera within a week of leaving Citi Mortgage's Ann Arbor Michigan office.  Once Citi issued the commitment letter, the mortgage for the Oak Avenue fraud was a done deal, from this point on there was no more scrutiny of Mr. Barrera's credit history in other words, wouldn't this be a great time to report the other identity theft?  Take a look at the date on the police report for the boat identity theft deal...

Bernardo Barrera Boat Identity Theft Police Report

You see that?  The report was filed on February 8, 2008 after Citi Mortgage sent the commitment letter for the Oak Avenue mortgage, essentially at this point the Oak Avenue mortgage was a done deal.  Remember, once Mr. Barrera screams identity theft, he's busted out, his usefulness as a straw buyer is finished.  Coincidence or perfectly engineered scam?


That's enough for now.  Let's not forget that this steaming pile of $hit that the state calls a case is only 6 days away from trial...

Straw Buyer 2.0 and an update on Roger Besu.

Everyone remember Roger Besu? He was the attorney that we discussed last month that made away with $2 million dollars of clients money from his trust account. Based 0n what we see in the clerks website, he was arrested on September 7, 2009, bizarre as it may seem though when we wrote the original blog post on Thursday August 27, 2009 there was no record of a case on the clerk of courts web page, yet now when you check the case the clerks website shows that case was opened on April 28, 2009?! Is that strange or what? I don't pretend to be some sort of mental giant or well versed in the inner workings of the legal system, but you have to admit that is bizarre.

Moving right along, lets discuss for a moment the term "Straw Buyer", what exactly does that mean? Here's the definition of a "Straw Buyer" according to this guy:

A straw buyer is a person who uses or allows their credit to be used for the purchase of a property they never intend to use or control. Straw buyers can also be used to purchase non-owner occupied properties by being paid simply for the use of their credit.

He then goes on to suggest the following recruitment ad for said "Straw Buyer"

CREDIT PARTNER - GET PAID FOR DOING NOTHING!
All you need to do is let us use your credit score to purchase properties and we will handle everything else. We will make the down payment and pay the monthly mortgage note and give you $10,000 for each purchase you make. You don't even need to come to the closing! Call Leroy at 404-555-1212 and I will give you $10,000 cash on your first deal by the end of this month!

I take issue with the guy calling the Straw Buyer recruiter "Leroy", considering today's geopolitical atmosphere I find that to be very racially insensitive!

"Get paid for doing nothing!"

I've been doing nothing for 40 years and haven't gotten paid a cent! DAMN, where was I when this ad was published! Regardless though, we all know the scam, at the height of the mortgage and housing bubble banks were literally lending money to anyone with a pulse, whether the loan was for a home, car or anything for that matter. Pay off the "Straw Buyer" for the use of his credit, bust him out and move on. In these instances the guy who sold his credit wasn't a pillar of society anyway and more than likely didn't give a rats ass about his credit going down the drain, the lure of cash in hand was far more attractive than a credit score! For the sake of our discussion lets call this guy "Straw Buyer V. 1.0."

Lets now move into the twilight of the easy credit era, a time where banks were tightening up their lending standards, lets say for the sake of argument that this period was the end of 2007 through 2008. With credit getting harder to come by, what was the scamster to do? By now the mortgage fraudster knows that his stable of "Straw Buyer V 1.0's" is nearly useless, now you need real people with real credit histories! People who fit this description aren't going to give up a sterling credit history that they've worked so hard to achieve! What to do?! Never underestimate the criminal mind, where there's a will there's a way, when there is money to be made, the scammer will figure out a way to get it.

I'm going to propose the perfect scam, please keep in mind that I'm not accusing anyone of doing anything illegal, this is a purely hypothetical situation. We've established that the "Straw Buyer V. 1.0" has outlived his usefulness, now lets figure out how to lure the "Straw Buyer V. 2.0". What if I came up with a way to use someones credit to pull off a six figure scam and at the end of the day had the person who sold me their credit off the hook for the loan I obtained with their credit? Check it:

1. Recruit a "Straw Buyer" to sell their identity.
2. Find a home that will allow a fraudulent transaction with a LARGE PROFIT.
3. Use the "Straw Buyer's" identity to obtain a mortgage for the transaction.
4. Create false identification using the "Straw Buyer's" identity but with someone else posing as them.
5. Close the transaction with impostor, pay off the "Straw Buyer" and pocket a nice chunk of money.
6. Make the payments on the fraudulent transaction for slightly more than one year.
7. Once at least one year has passed, have the person whose identity you used in the transaction scream identity theft.

Once the loan becomes at least one year old, if it does go into default the loan is looked at with a lot less scrutiny than a loan that went into default in less than one year since its inception. Most importantly though, once a loan is one year old, the mortgage broker that initiated the loan is no longer responsible if the loan goes into default, if its less than one year old, the mortgage broker is obligated to buy the loan back. After a year when the "Straw Buyer V. 2.0" screams identity theft, the bank goes back and looks at the loan, realizes that indeed the person who signed the documents was not the person who's identity got "stolen", the bank discharges the loan and that's it! If anyone goes back to the seller, what are they going to say? They knew nothing! Plus, its not illegal to make a profit now is it?! The "Straw Buyer V. 2.0" walks away unscathed, the seller walks away with a nice profit, no one is ever able to finger the guy who signed all the loan documents and the bank gets the shaft.

Perfect isn't it?

THE TRAIN HAS LEFT THE STATION! Detective Jorge Baluja and his arrest affidavit.

As I mentioned before, the arrest affidavit that I obtained for the Estefano, Romney and Martinez case is lengthy. Its going to take a few days for me to digest the whole thing and check with a couple lawyers to get their opinions on different things that I see in there that don't seem kosher. Overall, I can see there was definitely some sort of complicity between John Romney and Michael Martinez, there is no denying that.

I don't know much about law, specifically criminal law, if anything you can say my law background is limited to what I learned from watching TV, the common thread in all the investigations from the TV shows was "follow the money" when investigating. By chance, I found this story in the Huffington Post where Glenn Theobald (the head of the Miami Dade County Mortgage Fraud Task Force) talks about his Mortgage Fraud Task Force. I found this quote funny:

We're talking cases that rival, in complexity, the painstaking drug-organization takedowns of "The Wire."

I loved that show! One of the things that Detective Lester Freamon made a point of saying again and again during the infancy of their unit in the first season was "Follow the money", specifically:

...start to follow the money, and you don't know where the fuck it's gonna take you.

Cool. I miss that show. So taking Detective Freamon's advice, why don't we follow the money in the case at hand. Based on the arrest affidavit there are three players:

1. John Romney - this is the seller of the home located at Oak avenue that purchased said home only days before the closing that occurred involving the "straw buyer" and the Identity Theft. Based on the arrest affidavit he netted $234,896.88. Not bad for a days work!
   
2. Michael Martinez -this is the guy who lent the "straw buyer" $125,000 as the earnest money for the closing and was then repaid the $125,000 and $10,000 more after the closing, therefore his net was $10,000
   
3. Delaila Estefano -this is the attorney that closed this deal. Based on the arrest affidavit I see NO NET GAIN! That is besides whatever fees are charged for the closing (closing costs, title insurance etc), I sincerely doubt whatever that amount was comes even close to what the other two guys made.

Alrighty then! Lets go back to Detective Lester Freamons (a TV detective, not a real one) quote:

...start to follow the money, and you don't know where the fuck it's gonna take you.

Logic would dictate that you go after Romney and Martinez, these two cats are the ones that made off with a sack load of cash so wouldn't the focus of your investigation be on these guys? Strangely enough though after reading the affidavit thoroughly it seems as if the target of the investigation was the attorney. Bizarre huh? From what I read it looks like Detective Jorge Baluja didn't even look into the guy who claimed to be the victim of the Identity Theft! The only mention he makes of this guy is that "he has good credit" and that:

The true Bernardo Barreira (sic) provided an affidavit that he never bought the above monetioned (sic) property, never applied for any loan to buy it, nor did he give anyone authorization to do so on his behalf. He testified that he become (sic) aware of this situation through his credit monitoring service. He then contacted the Miami-Dade Police Department, which resulted in this investigation.

Anyone see anything strange in that statement? For the astute among you I'm sure you already see the problem with the statement, we'll read between the lines a little later on. I also get a kick out of the detectives statement where he says "he has good credit." How does the detective know? Did he pull his credit report? Did the "victim" provide him with a copy of his credit report? This is where the good detective steps on his first land mine. The nature of this investigation could HAVE COMPLETELY CHANGED if the detective would have simply investigated the "victims" claims.

He didn't. This is where things begin to go horribly wrong.

The train has left the station...